Home owners and property owners buy insurance for lots of different reasons. Liability protection is a great reason to have insurance. But what first comes to mind when thinking about property insurance is coverage in the event of damage to one’s property.
What happens if a fire burns down your home/building and all of the contents therein?
What happens if a pipe bursts and ruins the home/building and everything inside of it?
What happens if the roof starts to leak and damage the ceilings, walls and flooring?
Who is going to pay for the property damage?
What happens if the rental arrears on the unit are lost on account of the damage?
If you don’t carry property insurance, you will have to pay for these repair and replacement costs of the damaged goods/equipment on your own.
But the majority of property owners carry some form of insurance. It’s a requirement under pretty much every mortgage. You can certainly own a property mortgage free and not carry any form of insurance on the property, but that’s living quite dangerously to say the least and not recommended by this personal injury lawyer; or any insurance broker.
There are a number of different property insurance products and riders which you can purchase. A good insurance broker will be able to explain to you the different products/coverages available along with their costs. You can purchase ice damming protection; sewage backflow protection; loss of rent coverage; business interruption coverage; coverage for damaged equipment and machinery; and increase most of those coverages beyond their normal limits. The idea is purchasing a policy which best suits your needs.
Once an “event” happens which causes damage, you will need to report your claim right away to your insurer. An “event” can be described as pretty much anything which has caused extensive damage to your property. An “event” can be a fire, flood, bad storm, burst pipe, explosion, rain storm etc.
If you do not report the claim and damage right away to your insurance company, you can be out of luck in terms of claiming under the policy. Don’t sleep on reporting the loss. If you do, you are risking that the insurer will tell you that you’re out of time to recover anything under the policy.
The insurer will likely assign the claim to an adjuster within their own company, or to an independent adjuster. The role of the adjuster is to handle the day to day communication and management of your file. There will be a lot of calls, emails and letters between you and the adjuster handling your claim; so get ready for it.
The adjuster or insurer will send you a Proof of Loss Form. This is a very important form. This is a 2 page standard form. Section 136 of the Insurance Act requires that the insured (claimant) file the Proof of Loss Form to the insurer. The form asks for information such as:
- Name of Insurer
- Name of Insured
- Policy #
- Time and Origin or Loss
- Location of Loss
- Were the police notified?
- Were any changes made to the use or possession of the subject property since the policy was taken out?
- Is the insured registered for HST?
- Provide an accounting of the losses including the item(s) damaged, the replacement cost, the cash value of the loss
- Detail if the insured has any other additional insurance which may cover the reported loss
The Proof of Loss needs to be signed by the Insured(s), and they must solemnly declare that the claim and the information contained in the Proof of Loss are true and to the best of their knowledge (don’t lie!).
If an insured does not file a Proof of Loss form, the insurer will likely take the position that they don’t have to pay on the claim because the statutory provisions under the Insurance Act have not been completed.
The law acknowledges that not everyone is perfect; and dealing with destruction to one’s home or business can be very stressful. It’s not like you deal with these losses every day. This is why the doctrine of “relief from forfeiture” exists. What this legal doctrine stands for is that just because you didn’t dot every “i” and cross every “t” doesn’t mean you’re going to be barred from seeking relief under the insurance policy. Imperfect compliance should not be a complete barrier to one’s ability to recover under the insurance policy.
All of this sounds good, but ultimately, it’s up to a Judge to decide whether or not s/he will grant relief against forfeiture. And what these will mean is that the Judge will want to examine the circumstances in terms of why a Plaintiff has not complied with the requirements under the Insurance Act.
Did the adjuster mail the Proof of Loss Form a dozen times to a Plaintiff and that Plaintiff simply ignored the forms; despite the fact the insurer indicated those forms were very important and a statutory requirement under the Policy to make a claim?
Or perhaps the insurer granted the Plaintiff a waiver to file the form, and the parties simply forgot about getting the Proof of Loss form completed?
The facts surrounding the reasons for failure to file the Proof of Loss Form on time, or adequately are relevant and will establish whether or not a relief from forfeiture claim is granted, or not in favour of the claimant. But hopefully, the claim doesn’t have to reach that stage and all of the parties are playing nice so to say.
We all hope that all property loss claims are approved for the full value of what the Plaintiff expects to receive. But sometimes parties don’t see things eye to eye. One party may appraise the value of the loss much lower than the other party. The insurer may refuse to pay out for certain or all of the items on the claim on account of a technicality; or something they perceive to be a legitimate denial. When that happens, it’s important that you have a knowledgeable and experienced lawyer on your side to help you navigate these types of claims. Call Goldfinger Injury Lawyers for your free consultation.